THE lukewarm economic scenario notwithstanding, the life insurance industry witnessed a solid 66% jump in capital deployed during April-December 2008 at Rs 23,271 crore (Rs 13,990 crore), invested almost entirely by the private sector.
And why not. The sector witnessed 16% growth in total premium income to Rs 1,21,392 crore during the period as against Rs 1,13,048 crore in the corresponding period in the previous year despite a 4% decline in first-premium income. Total premium includes first premium income as well as renewal premium for the period. Interestingly, renewal premium witnessed a near-35% increase.
"Renewals are that part of a person's funds that are set aside for the long term. Hence, come what may, individuals try and make sure renewals are paid. In addition, renewals are also directly related to policies sold in earlier years; the industry has been growing at a hectic pace in the past few years," Kotak Mahindra Old Mutual Life Insurance senior vice-president Subashis Ghosh said.
Further, benefits paid to policyholders, including maturity as well as withdrawals, stood at Rs 37,000 crore during the period, compared with Rs 33,800 crore in the previous year. According to data released by the Life Insurance Council, the industry body for life insurance companies in India, renewal premiums for regular unit-linked insurance plans (Ulips) witnessed a phenomenal 216% growth to Rs 26,637 crore for the nine-month period ended December 31, 2008, as against Rs 8,425 crore in the comparable period. Non-linked premium cumulatively rose to Rs 52,529 crore from Rs 50,268 crore in the earlier period.
Non-linked premium from single-premium policies doubled to Rs 9,976 crore (Rs 4,932 crore), whereas premium from Ulips decreased from Rs 15,472 crore to Rs 10,421 crore. New premium from regular-linked policies was down from Rs 25,204 crore to Rs 21,438 crore, whereas non-linked policy premium increased to Rs 10,392 crore (Rs 8,746 crore).
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